Global Energy was to build the new refinery in the State owned Ceylon Petroleum Corporation (CPC) land, operate it for 30 years and hand it over to the CPC.

The new facility was expected to treble Sri Lanka’s oil refining capacity brining it up to six million tonnes per year.

But plans are now “differed” until “further study,” Cabinet spokesman Nimal Siripala de Silva told journalists on Thursday, after trade unions threatened to strike, if the deal went ahead.

“The Prime Minister and the Minister of Power and Energy have both requested time to further study the matter and this has now been differed,” said de Silva.

Last week CPC trade unions threatened to strike unless the project was stopped.

Trade unions

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